State Compensation Fund v. Fink (7/1/2010)

July 9, 2010

Arizona Court of Appeals Division One Holds That the 2007 Amendment to A.R.S. § 23-1023(C) – Which Gives Workers’ Compensation Carriers the Right to Intervene in Certain Actions – Applies to Motions to Intervene Filed After the 2007 Effective Date of the Amendment, Even in Cases Instituted Before the Effective Date.

In 2004, Juan Manuel Lopez-Verduzco (“Lopez”) was injured in a car accident while on the job.  He received workers’ compensation coverage from State Compensation Fund (“SCF”).  In 2006, Lopez sued Continental Tire North America, Inc. (“CTNA”) for causing the accident.  SCF claimed a lien against Lopez’s potential recovery under A.R.S. § 23-1023.  In 2007, the legislature amended A.R.S. § 23-1023(C) to provide workers’ compensation carriers the right to intervene in personal injury actions to protect their interests.  In 2009, SCF moved to intervene under A.R.S. § 23-1023(C), but CTNA opposed the motion.  The trial court denied the motion, and SCF timely filed a special action.       

The ArizonaAppeals Court accepted jurisdiction of the special action because SCF presented a pure legal issue of statutory interpretation, the pertinent facts were undisputed, the issue was of first impression, SCF may have lost the opportunity to intervene by the time an appeal had been completed, and special action relief was expedient and promoted judicial economy.

On the merits, the Court granted SCF relief, holding that the 2007 amendment to A.R.S. § 23-1023(C) granted SCF the right to intervene.  The Court rejected CTNA’s argument that application of the 2007 amendment would constitute a “retroactive application” prohibited by A.R.S. § 1-244.  It explained that the application of statutory changes in procedures to proceedings already pending does not constitute a retroactive application unless the changes affect or impair vested rights.  In this case, no vested rights of CTNA were impacted or impaired by application of the amendment. 

The Court further explained that even if application of the amended statute constituted a retroactive application, the amended statute nonetheless applied because there is an exception to A.R.S. § 1-244.  A statute may be applied retroactively if it is merely procedural, and not substantive because parties do not have vested rights in given modes of procedure.  In this case, intervention was procedural, rather than substantive, in nature.  

Presiding Judge Gemmill authored the opinion; Judges Thompson and Irvine concurred.